Manufacturers are continually facing challenges and changes as they embrace Industry 4.0 practices to stay competitive in today’s environment.
With companies looking to improve operations, sustainability, and competitiveness simultaneously, implementing smart factory initiatives and connected supply chains are among the best ways to drive efficiency. This strategic implementation of technologies for digital manufacturing will continue to be a differentiating factor for companies this year.
In this blog post, we discuss the pressures on today’s manufacturers and detail how key factory digitalization drivers are shaping digital transformation in 2023 and beyond.
Pressures on Manufacturers
Manufacturing firms are currently under various pressures affecting operations, costs, and decision-making. The intensity of these challenges continues to evolve.
Currently, only 19% of companies reported that their supply chain structures were fully integrated, but this is projected to more than double (to 47%) within the next two years. Without the right technology platform, meeting increasing industry demands and managing pressures like trade disputes and supply chain slowdowns can be extremely challenging and costly.
Inflation is also having a significant impact on manufacturing, especially when it comes to raw materials. With energy costs increasing, using more sustainable materials and packaging is necessary to meet the industry's ever-changing regulations. This requires enhanced visibility to support compliance with applicable regulations and customer standards.
In addition, manufacturers are facing the urgent issue of retaining talent and managing labor shortages since a large number of the industry’s workers are heading for retirement. According to the Bureau of Labor Statistics, nearly 780,000 jobs were unfilled in the manufacturing sector as of November 2022. The manufacturing industry is working to find ways to motivate potential candidates to mitigate staffing issues, including higher wages and opportunities for advancement.
All of these pressures underpin the pursuit of digitally advanced strategies. Next, we’ll take a closer look at how manufacturing’s high-pressure environment is responsible for today’s top digitalization drivers.
Today’s Digitalization Drivers
Pressure necessitates change. In no sector is this truer than in manufacturing. With industrial and manufacturing verticals struggling to attract and retain younger recruits, labor shortages have increased levels of automation and driven technology upgrades to help attract digitally-savvy individuals to the manufacturing labor force.
Digital, IIoT-ready technology enables companies to gain better visibility into their supply chain which, helps them note the availability of raw materials, schedule arrivals, and understand the impact on production lines. Also, manufacturers can leverage technology to ensure the work environment is safe by recording production activities to demonstrate that processes adhere to industry regulations and remain in compliance.
With innovative technology, manufacturers can mitigate security incidents and form a digital thread of clean operational data that helps them fully understand their operations. With this understanding, they can uncover opportunities to optimize processes.
Yield improvement is another digitalization driver. Manufacturers can improve yield by investing in technologies to support quality assurance and avoid unplanned downtime with predictive maintenance and condition-based monitoring.
These drivers are increasing the urgency and velocity with which manufacturers embrace digital change. However, a crawl, walk, run approach works best when it comes to achieving digitalization.
Assessing the Manufacturer’s Digital Maturity
To optimally focus and pace your digital investments, it’s important to know where your company ranks in the digital transformation journey. ABI Research has broken down the stages of digital maturity into five levels:
- Level 0: Human Controlled
- Level 1: Early Automation
- Level 2: The ‘Modern” Factory
- Level 3: IT/OT Integrated
- Level 4: Digitally Transformed
- Level 5: Lights Out Manufacturing
ABI has revealed that their research shows most of today’s manufacturers have made a solid start and are currently at Level 2 or 3 in their digital maturity journey. To understand and maximize their competitive advantage, it helps manufacturers to understand how their digital maturity compares to that of competitors. And research indicates that comparative digital maturity is a problem. In fact, a recent survey cited 54% of manufacturers believe differences in their digital maturity among industry partners were an obstacle to success. The lack of digital maturity can lead to competitive disadvantages. Those with lower levels of digital maturity may struggle to keep up with those who are more advanced in their use of digital tools and technologies. It can also have implications for productivity, efficiency, and innovation within organizations.
Using the five levels of digital maturity as a guidepost, manufacturers can access where they fall and create a plan that details actionable steps to advance their transformation. By Level 3, optimization projects are focused on productivity, fewer applications reside in data silos, and there is a higher level of data sharing company wide. The highest levels of digital maturity are centered around predictive maintenance, scenario planning, optimized performance, and implementation of technologies like digital twins.
Driving Your Own Digital Transformation
No matter the specific benefit of driving your digital journey, a vital first step is selecting the right solution and partner. The right digital manufacturing solution and partner can help manufacturers fully harness the power of digital solutions, streamline their unique workflows, and optimize team performance through confident end user adoption. Aegis’ FactoryLogix is this solution.
FactoryLogix is an IIoT-driven MES solution that has been designed to lead world-class smart manufacturing initiatives, uncover every opportunity for optimization and automation, and unlock tangible Industry 4.0 advantages. FactoryLogix can seamlessly connect people, processes, systems, and devices, enabling factories of all digital maturities to make smarter decisions and embrace digitalization in manufacturing with ease.
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